City Council - workshop

the budget workshop. Today is August the 5th, 2026. It's 5 p.m. I'm going to call the roll. Please answer. Councilman Summerall. Here. Councilman Summerlin. Here. Councilman Pollard. Here. Pro Tem Brad. Here. Councilman Robinson. Here. Everyone is here, so we do have a quorum. We're going to stand up and say the Pledge of Allegiance of the United States and to the flag of Texas. If you want to remain standing, we're going to have a short invocation by Councilman Robinson.

Father, thank you so much for giving us the privilege of serving our city. I pray, Father, that as we discuss the budget this evening, make decisions and craft policies, that we will always keep in mind that we're doing this for the people and for their best interests. Remind us, Father, that we are in this position not to be served, but to serve. Father, bless our staff, our city, our residents, and protect us all. We ask this in Jesus' name. Amen.

Alright, we're gonna move on to item number five, Citizens Forum. Citizens, I invite you to speak for three minutes on matters related to city government that relate to agenda or non-agenda items. Speakers are asked to approach the podium and give their name and address before sharing their comments. I understand that no one has signed up. Is that correct? So we're gonna move on to item number six. At this time, I'm gonna

turn it over to our financial director council um i sent out um kind of a memo last week about the tax rate so this item is going to discuss the 2026 property tax rate um calculations um so i do have it on the screen as well so this year's um our current tax rate for the 25 tax year was 18 I'm used to it being so far away on my dice. The no new revenue rate for this year is 1849. So there is increase from last year's tax rate. But it will yield the same revenue to the city as last year. The voter approval rate is 1919 per 100. And our certified taxable value is about 1.7 billion right now. Also in this chart, you'll see I kind of put where our current rate is so you can see how the share breakout would be between the INS, which is our debt service requirement, and our general fund share, which is our maintenance and operation, the M&O share. I did it for the current rate, the revenue rate, and the voter approval rate. So in order to bring in the same or very close to the same revenue as last year, you would have to go with the 1849 rate. And that is, and then on the second page here, I broke it out. So this year our median, so truth and taxation laws require the tax assessor to assign a median house rate to kind of use as a taxpayer impact value. So this year the median median homestead taxable value is about $437,000 per home. Obviously that's not every home, that's just the median. There's houses will be less, there's clearly houses that are more. So if we went with the no new revenue rate of 1849, it would be less than, it's a .0028 cent increase from 1821. it's about 1.5% increase. And it would increase that median home valuation tax bill about $36 or 4.7%. If you went with the VAR, it would be a .0098 increase or 5.4%. And it would be an additional on average $66 or 8.9% increase to the median homestead value Because if you go to 1919, it would trigger an election. The highest you could technically go is 1918 without having a tax election, which I would not recommend wanting to have because it can fail. And also, there's a lot of time and that goes into consideration on that as well. So, and this just kind of shows you that same information that I typed up up there.

or any questions about the tax rate or calculations with it mr mayor and lisa i think we should proceed at this point at the no new revenue rate but i'd also like to postpone number two to the end of the meeting we are yeah all right just about when we get to the item so the differential in revenue that you're kind of looking at is um

Should have done that. Apologies.

I got too many mouses up here. From the current rate to the 1919, it's only $167,176.

Thank you, Charlie. So yeah, because of last year, we had a lot of unused increment, which is basically, truth in taxation laws allow you, if you persistently go below your NNR or at the NNR and you forego that increase that you could have done, you can bank that differential. And last year, it did help us because of the police pay parity larger bump we had to make. So we did kind of exhaust a lot of that unused increment because it's based on the last three years. So if you don't use all of it, it falls off. And then it just keeps bringing that bottom amount up and up. So that's why the difference between the NNR and the VAR is a lot smaller this year than it was last year.

So we're good for the INS? For the interest in sinking funds?

For all of it, yeah, for the rate. And basically, in the budget document, I just put the same revenue as last year into our M&O portion, the general fund. I did rework it with the 1849 number. It's about $4,000 short than what we brought in last year, because it's all rounded, and there's going to be some difficulties. So if you go with the 1849, you would bring in about $1.4 million into the general fund, whereas it's about $4,000 less than what I had from last year. And the question might come up of why is the NNR higher than our tax rate this year, right? Because ideally you should have new improvement that kind of, you know, offsets that. However, the 8th and 9th legislation had House Bill Number 9, which basically exempted any personal business property that did not exceed $125,000. it exempted it from the tax rules so it did remove some value from us and then we didn't have enough new improvement value because everything is based on as january one so um like with the wood lofts it's based on how regressed they are as january one so obviously their tax bill is not going to be the same thing that like next year their full value should show up so it's just basically wherever something is so so

So you're saying that HB9, I just want some more clarification on that. Is that like the business had to be valued above that before they were taxed or they're able to take that off?

No, so I use car dealerships because that's usually who we see the most on some of these tax rules. We don't really have any. But for, you know, so each vehicle they keep on the lot, they have to pay a property tax on it because it's a business type property. So if any of those cars don't exceed $125,000 in valuation, they can exempt it off of the role, if that makes sense. Yeah. Or another thing, like a lot of companies that lease, like Sunbelt would be a good one. They have to pay property tax on their equipment because they lease. And it's a business property. So yeah. Yeah. So they would get to exempt whatever. Yeah.

That's their inventory.

Yeah. So I couldn't get clarification if it was an aggregate or not. And like and I'll be honest, when I talked to Ms. McRae, this has been the hardest year for her with the tax worksheets because of all the changes that happened in the 89th. And then we know there's going to be a lot coming up in the 90th that starts in January. So she said this was a very because Legislation will put a law out, but it's a lot of gray so everyone's trying to figure out With the direction from the comptroller. How does this calculate out? You know the comptroller is the one that issues out the notices of calculations and everything so There it was a little tricky this year with the new laws.

I think it's gonna get trickier going forward. Oh, it will Yeah, yeah, that was one of my biggest concerns when I got on council was to be The one thing that we just don't pay attention to is what happens at the state level and how that affects us. And here's the very first tickling of this coming in.

Last legislation, the mayor and myself and Kathy had worked on several letters in protest of the expenditure cap and revenue cap. Those were the biggest bills that were really going to be detrimental. And we worked, we sent those to Mr. Toast's office. We sent them everywhere. I think at one point, just in protest of it, and I actually wrote, did out calculations to show how it would hurt our city particularly.

Yeah. And all indications so far are that they will tackle this again. Yeah. In the coming election.

They are going to. And there's got to be some type of an amendment for cities her size

I was invited to a TML summit legislation session at the end of the month, me and 140 other delegates from the state. And they really loaded it with financial professionals this time because the biggest priority is property tax and expenditure caps. So TML invited me out to work on some policy proposals. So I think out of our area, it's me and Jersey Village's finance director are going. We have representation for our area, so we'll try to push, especially for, I think, the Houston metro area. It's a very unique area. We say this all the time. We're a small city, but we're not. You're on one of the biggest freeways of the country outside of the fourth largest city in the country. in Houston's back door. So they don't take that in consideration when they look at population growth. Because a lot of the expenditure caps were based on CPI and population growth, which we're fairly built out. So our population growth isn't going to be, so that always puts us at a negative. They don't take into consideration your daily population. They just consider your homestead by population. But with the Portofino, with all these other shopping centers. I think, Sam, what was it, 50,000 we anticipated visitors a day, about?

Let's do it.

So our population grows from just shy of 5,000 to 50,000 pretty quickly. Right, every day. Yeah.

That's not counting the 141,000 that go by on the free ride.

So that's what a lot of the legislation won't take into consideration. And then also the smaller cities that are out in West Texas that don't have a sales tax base. It doesn't take into consideration those as well.

I think that there are more cities like that that are not like us that depend on retail.

We saw that at that breakout meeting.

We did.

So there's a lot of moving parts, but this year will be highly focused on property tax reform and most likely expenditure caps and revenue caps. And yeah, it's going to be interesting, but we'll we'll tackle it as we can. So that's pretty much in a nutshell. The I did do a little breakout just to kind of show you. So like this proposed tax rule, You can see that residential is about 30% of the total taxable value. Commercial is about 70%. And of the total that would be paid to the city, about just shy of a million would be from the residential side, and then the remainder is from the commercial. And this is based on a 95% complete certified rule. There's 5% underneath the protest still. And even if we move on from this agenda item, we're going to have another one at the end of it discussing this. So if we want to brainstorm more on that one, we can as we go through the budget. But if no one has any questions, I can move on if you would like.

Like I said earlier, we're going to move item number seven. We're going to discuss it at the end of after item number 10. So we're going to move on to item number eight, budget discussion.

So the first budget discussion is going to be the general fund. As I just showed you, there was a little bit differential in the sales tax revenue based on the NNR. I've been playing with the sales tax numbers. I will probably have an update for that soon. And then... So that's all I have for revenues. Typically in the past, what we've done is gone through each department again, but since we already did that in workshop, I don't know if there was, the only department we did not talk about was CVB, but for the general fund, was there any other department that we wanted to talk about again or was there any follow-up questions? They say pretty stagnant, all those budgets, other than the personnel costs, obviously.

My own. My only question, did you utilize zero-based budgeting, or did you use prior year's budget and just build on top of that and assume everything's going to happen that happened prior year without looking at cutting as much as you can?

So with the expenditure side, each department does their own budgeting and then turns it into myself. We do base it off of a zero base. The majority of our, in these departments, of our revenue, I mean our expenditures, sorry, still revenues, is going to be personnel costs. So those are automatically just a phase in. operational other than the personnel costs typically a lot of those are aligned with contracts um that are already set or cost of increase and then there are going to be your standard boilerplate um you know accounts like office supplies and operating you know that are pretty much stagnant and they just carry over year over year because they're as needed um i think that's might be answering your question

Kind of.

Okay. But other departments can chime in on how they develop their budgets. You know, finance is pretty much a bare bones budget. Ours is based on what we have to pay for audit, the appraisal share. You know, it's pretty standard. But other departments have a lot more expenses than I do. So if anyone wants to, if there's any particular one you want to look at.

If I have a department, I would think to me, we've laid out all the expenses I had this year. I can say, do I have to have all of this, do I have to spend all of that again next year, or can I trim this, can I trim that, and go line by line and trim as much as I can, especially if we've been coming under it traditionally?

Yes, so what I do typically in front, so in the budget book in front of each department, I have the summary change sheets. So it'll show you if there's been decreases, like admin had a decrease to the newsletter because they're going with impact magazines, so they found a better price cost for that, right?

Where is this one at?

It's in the budget document. It's before each department. Got it. So there's those things. They were moved to several dues and memberships because they don't want to participate in them. They decreased their miscellaneous supplies. So I do this just so it's very transparent to exactly what changed. So you can see the thought method for each department

decreased what increased stuff like that so each department had had to come forth and say this is what I busted for travel and entertainment last year I'm cutting as much as I can to save the city in these areas so my new budget for travel and entertainment next year will be this amount did every department do that

So every department kind of budgets to travel and train a little bit differently. Some do it by position. Some do it as a group total. Like PD has so many employees. Sorry, I keep forgetting the microphone because I keep trying to make eye contact. So like with police department, they have so many employees. And it doesn't mean they're all going to travel and train that year. So they do more of like a grouping. costs for their non admin side. So for patrol, but then other departments, um, same thing with roles of department, all the public works guys aren't gonna do training every year. So, or if they do, it's gonna be smaller trainings, not like a big, um, overnight training. So there's some of the departments that don't wanna commit. They put more of like a dollar amount that you not exceed than to allocate it per person.

I think that's what that's not zero based budgeting. Yeah, I think it needs to be more specific if I'm going to send this this this person to entry-level training program Next year I'm not going to have that person do the same thing because he's already trained So I can cut that for to that particular training program out next year it would be better to go by department and by person and make each of those lines a Determination for each line trying to save as much as you can cutting as much an example is the the money that we spend for the city for events of Going through I know Charlie is going through and looking at each one say do I have to have this amount for this? For each of these events cannot trim this one or trim that one instead of just plugging in the same thing we've always done And Charlie has come up with some suggestions. Because I said, we're going to have to cut. We need to really save as much as we can. Where can that be? And he's already got some ideas on where we can trim and save some money.

You're talking about the Civic Club?

Civic Club. And it would be nice if every department had that attitude and looked at it and said, what can I do to save? Because we don't want to take taxes up if we can help it. And if we have to, take it up as little as we can possibly take.

So it looks like, I mean, if I'm reading this wrong, please correct me, it looks like our total yearly new recurring cost is somewhere around 800 grand.

For the whole budget or just for general fund?

Yeah, for police, pay parity, municipal court, net impact, bulk trash, equipment replacement contributions.

Oh, for the special consideration items? Yeah. I could double check. I don't know that off the top of my head.

And then even if we go up to 0.19, as high as we can without having a tax election, What what is that going to give us an extra 165 grand if you go to the VA but just below the BAR?

Yes Well, so these items are in here or just for consideration they're not going to be all approved We know this this is just to bring to you. Also some of these items and special consideration items are non-recurring items and so we can use available cash to pay for those instead of putting them against your tax rate because they're one-time purchases. Typically, when you look at a tax rate or a budget, your operating budget should be clearly for the things that reoccur every year. So personnel, contract costs, stuff like that. Like landscaping, trying to think of some other contracts like that. Like on the water sewer side, they have tons of contracts they have to do every year, like sludge hauls and chemical maintenance and stuff like that. But for other things that are in that special consideration, some of those studies, some of those projects, those can be allocated out of available cash because they're not recurring in nature. So typically your operating budget should be only those things that recur every year. Thank you for that explanation.

So the biggest one is? Equipment replacement contributions. That's a one-time deal.

Well, so we do that every year, but because it's a capital asset based program We use cash to fund that it just alley It just restricts it for a replacement so that it puts a hold on it so that it can't be used for anything else Basically, thank you.

Yeah, no problem Well, the biggest things are personal expenses and contractual expenses That's really we're A lot of this is police.

Yes. So in the general fund, especially, it's a government services based budget. So government services is typically, you know, police department fire. It's a big it's a big personnel budget. You know, water sewer doesn't and CBB. Those are just kind of opposite. They have more. contracts and stuff like that, operational costs than they do personnel costs. So, but you know, water sewer is technically a business type activity. It's, that's more of like, as if you're running a business than it is a government service. But because it is, the city controls our water system, it helps with economies of scale on a lot of our costs and administrative costs, because you don't have to hire other people, because they share like, they share finance people, you know, so you don't, You say that's why our water rates can be subsidized lower, because you do have that economies of scale with the city controlling it. But it is to be ran kind of like a business, and that's why it stands on its own most of the time. We made that, a couple of council cycles before made it very, that this should be, you know, in the past it's been kind of supplemented with general fund, and that's not usually good practice. So a couple of councils ago, they determined this should be a self-sufficient fund, and that's how we've been treating it since then. Was there any particular other questions about the general fund expenditures? Or if there's any department we want to hone in on?

You just want to talk about the whole general fund, not department fund?

We talked about it before, but if there's any changes that... Well, I just don't want to breeze over the whole thing. No, you're good. I could do a quick rundown if you want me to.

Well, no, I'm not trying to make you do any work. No, you're good. I'm here, you know, so... We had the budget a week when the first thing, you know what I mean. And I'm going to pick on Ernest here. He didn't have time to really look at this. You know what I mean. Nor did I. Nor did... I don't think any of us. No, really. So I don't want to prolong the meeting. I mean, just for the sake of prolonging the meeting, but I do want to talk about some of these things.

So I'll just go over the summary change sheets for each department, because that's usually easier to kind of hone in on and see what happened. So for like the administration department, they had a 3.99% increase to their operating budget. And the majority of that is going to be obviously personnel cost, right? Like we've been kind of explaining. There's other small changes. There is, let me make, while we're already on here, So last year we had moved all the medical expenses for each department back into the department's budgets from the non-department budget where it's lived prior to me starting here. So there was some increases to the rates for insurance this year. I do put in a small percent increase into the proposed budget as a hypothetical just to have an earmark on it. So, this year I had anticipated medical would go up 6%. It did go in as a weighted 11%. So, I added those to the summary change sheet on the screen for each department. So, it's an additional 5%. And then, but our dental insurance that I anticipated a 5% increase. Excuse me, Lisa.

Could you make that bigger?

Oh, yeah. Sorry. Please.

I... That's why it came to see you. It couldn't read it on the screen at all.

So but dental had a decrease. So I had put in there a 5% increase, and it came in at 3%. So there's a 2% differential that went back into the budget. So the net change to the insurance is just for the general fund. Obviously, there's water, sewer, and CBB of their own funds. But it nets out to be about a $45,407 differential on the insurance rates from what was budget to what was to the actual. Also, there were some changes on some of the plan, sorry, tiers, so what the employee elects, if it's an employee only, employee and family, employee and spouse, employee and child. So there were some changes within the departments with different levels of needed coverage.

So I'm just looking at it, and I don't have the whole thing, But we're talking about admin, okay? So their salaries and wages went up 2.4% to the tune of $9,000. The dental, accidental disbursement went up 9.42%.

Well, that one changed because this is based on the proposed.

I understand, but the effect of the whole budget that we're talking about, because we are going to get to the bottom line. Well, that went up. Then the group insurance is up 23% to the tune of $72,491. And those are all figures that were on the sheet. FICA's up 1.7. So when you take all of these, that's where you get your 4% personnel expenses. It's hard to sit here and just look at all this and not really know where all the little pieces are in there.

So total personnel cost for like admin went up just shy of 24,000 total for all those category 61.

There you go.

And it's on this screen here, yeah.

And see, going forward, this is a recurring every year. Yeah.

What did it go up last year?

Personnel went up 64,000 last year.

What was the percentage? I'd like that recent column, just the total of that.

It's on Excel, so it's Word, so I got it. Yeah, PDF. No, I was just looking at the document.

Yeah. So 3% for you. So last year, 3%, this year, 3.9%.

Does that fall into, does some of that fall into the step?

Yes, so we factor in, so my software basically calculates the personnel increase for each person based on their anniversary date, so it's pretty true to what their pay will be. Historically, we've had to do kind of Excel based, but our software allows us to pin it down to the actual step raised month, so it gets a true accurate personnel cost.

So realistically, for all the different departments, we can look at, we can plan a 3% increase pretty much per year.

I would say three to four based on what the insurance rates come in at every year. That's the one that's a variable that we just don't know until usually the end of July, unfortunately.

Is the, probably a part of what I'm, I guess I'm looking at. I know there are some costs that are associated with it. The insurance, those types of things are, a lot of that's out of our hand. The only thing we can do is shop around for a better place unless we have restrictions on that. What I'm really looking to get at is what were the percentages of the revenue for salaries? Where did that fall? What was that last year?

Just the salaries general ledger, I mean account We had to be a whole lot last year because we had the police parity but that wouldn't afford to not for admin So

For last year, we budgeted, so the year that we're in, so you're talking about 25, right? So not the year we're in right now, yeah? Sorry, so for 25, we budgeted 439,000 and it came in at 432,000. So it came in pretty close.

Is there a way to extrapolate what 24 then was over for 25? Or you can do the 25 to 26. No, we haven't agreed on that one yet.

Are you talking budget versus actual, or are you talking about actual over actual? Actual over actual. Oh, OK. I'm sorry. Yeah, I didn't clarify. No, you're good. And the year-to-date numbers in this budget document are as of the end of June. So obviously, we've had another month of expenditure, so we're a little far behind.

But just do you have available 25 to 26 of what they wage difference or increase was from 25 to 26?

Yeah. So they did have a personnel move. And we had someone leave that was more tenure. So there's a little bit there. That's the other thing you have to consider is people move in, people leave in, stuff like that. So actually, the actual from 25 or the budget from 25 to the budget on this year was only $1,000 difference for salaries and wages because there was a lot of movement between, yeah. That's the hard part about salaries and wages because it's not always going to be, there's always some variables that happen. Yeah.

So Joe, to your point, admin went up 2.4%. Finance went up 3%. There's 14, okay. Pretty even on... I don't see the salary and wages on police went up just 4% this time. It was 22% last year because of the parity. But you can find all of that. You know what I mean? But there's so much more in category 61, which is personnel expenses, the whole thing. It's what Lisa was just talking about.

There's the group insurance. The rate is pretty close to what you said. Three to four percent.

Yes.

So if you just look at salary wages and taxes, you're usually at three, and then everything else factors in, so you're about three to four.

And a lot of that's out of your control.

Yeah. So workman's comp is also considered in there. So TML, how they do workman's comp, it's based on Obviously, the exposure rate for a police officer is going to be a lot higher than for me, right? Because I'm just at a desk. So every year, the poll has to do their actuarial calculations, and they figure out what's the appropriate exposure rates for position. And then we get those numbers, and then I calculate it against the payrolls.

Yeah, I guess what I was just trying to get at, and 100% understand all of the variations that... An employee isn't just, I got a paycheck. Yes, it's all the other factors that go in. It's all the other factors that go into it. We need to be aware of that. So many of that, if we want to provide those benefits to our employees, which we do, those are control factors that are out of our hands. And really what I was trying to get to kind of goes back to What is the actual take home for them? Because a lot of people, benefits are benefits. Sometimes they, some people understand the importance of it's great to have benefits. And some people just want the dollar amount. Somebody just wants the dollar amount.

Typically your younger employees look at more dollar amount, what you're going to bring home. And then your mid to older ten year employees look at retirement, health insurance, stuff like that.

It's a completely different thing. And so my only point, and I don't want to labor it any longer, was just to try to get to, what are our manageable? And are we doing the best program for doing that? And I know that I brought it up as an agenda item, talking about, do we reconsider our process? Do we take a look at our process? Do we need to make some changes? Do we need to modify it? Are we not paying enough? Um, you know, are we not, you know, as we just give someone a, you know, a program to raise and honestly their value is greater than that. We don't want to lose that knowledge or there are some that, and I haven't seen any of these people that just, okay, I don't have to perform for it. I'm just going to get it. It's just going to come year after year after year. And so, you know, This is just going into that question, do we need to? And I know there's an agenda item that Sam's brought on.

Yes.

I was going to allude to that. You're in luck. Yeah. So I know that we're, but I wanted to just talk about it because these are considerations. We can consider the things we can change. Yes. Can't necessarily affect the other items if we want to provide them to our employees.

At the end of the day, you look at it, it's just the cost of doing business. And it's up to us to manage that.

Exactly. 100%.

Been there, done that. Let's see, our revenue is dependent on sales tax, which we can't control at all who shops over here. Yeah. Or if they go away or COVID comes along or whatever, which devastated us several years ago.

Yeah. And the way we have it right now is our taxes is such a high dependency upon them performing terrific.

But then you sit, Joe, and look at Oak Ridge and everybody around you, and we're well below all of them. You know what I mean?

Yeah. Every year we try to, you know, the department heads know, if they ask me for a big dollar amount, I always go, where are the alternates? I like to challenge them to find other cost saving initiatives as well. But sometimes you can't avoid it. But like Charlie said, we do rely on one of the most volatile type of revenues in government. So that is something that you always have to be cognizant of. And we've done a really good job of keeping the tax rate low. Yes, we have. Even with our expenditures going up with the added need for you know, fire and police, and those are typically your big budgets. Everything else kind of falls in the line as support budgets. But we've done a really good job of keeping our tax rate low. Huge for many years.

And that's good. I'm not... Yeah. It's just that I want council to look at the whole budget.

We're able to do that, you know, with what we can control, but You know, sometimes we just can't because it's based on the economy, you know, pandemic, you know, other factors that are well beyond our control.

And you never know what's going to come down from legislation for unfunded mandates. You never know.

That's the greatest fear.

Yeah.

That's the landmines right now, in my opinion, for what can come down from the state. We cannot plan that.

And I just don't understand how that would be supplemented. how a cut in property taxes would be supplemented other than raising sales tax.

And you have to have the sales tax. The state's 6.25% and more too, of which a half a cent is MDV.

You know what I'm saying, at the state level.

The state would have to either release a portion of their claim back to the peccate order for the remainder, or they would have to increase their consumption tax rate.

Well, something for consideration, Councilman Pollard, talking about zero-based budgeting. There are things and different variables that we have that is beyond our control as far as, you know, fuel prices. We can't control that. So zero-based budgeting for that is very difficult because we don't know what to calculate. We have to go off of estimations. We have to go off of what we previously used before and then guess on what the fuel prices are going to average for the next year. Like this last year, we missed it because we we estimated based upon $3.30. Well, that increase went up higher than that. So those are variables that are beyond our control. But we do our best to budget based upon just the knowledge we have at the time. zero-based budgeting it's it's you can do that on on many of the items but there are some items that you just can't do that um you just have to go based upon some guesstimations unfortunately what he's trying to say is there's no contingency jim there's no yeah we try not to budget there's no thing so we call it available cash okay that's the term that

If we run over, we can just get it from available cash. Well, you know, I'm off. What's already encumbered of it? We don't know. And I've asked her. She's done a great job addressing that. You know what I mean? So even though this says there's $3,000 in available cash, not the 180, but just the $3,000, it's really $900,000. Right?

And I know it is.

you look at your last monthly report and that's what you had oh the three it's a three million yeah the three yeah the unexigned unsigned sorry but in other words encumbered we said we're on tam in the road with a million nine mdd said they're going to put in there you know and that's all even their money's in this pool that's what i'm concerned about why i started looking at all of this and feel the pinch that we yes we want police office yes we want to pay them but It's going to come to a point where we're between a rock and a hard place. And it's going to come, and it's close. And so do we raise taxes? Because it's all other people's money. All of our money is what I call opium, opium, other people's money. And we can't control it. So we just have to be, and we've done a great job, all of us, staff, all of us, have done a great job of managing it. And we're in good shape. I just want to keep it going.

I do too. And I just want to make sure that we're going line by line. I'm not trying to pick anybody apart. And the things that we can control that we could say, look, I can cut here and I can cut here. I'm going to cut to the bone if I can until it hurts the city. And then that's how much I would budget. On areas like gas and things that are totally uncontrollable, yeah, you've got to take a swag. but the ones that we can control to cut it as much as we can. And there are several items, I think, that every one of those lines have to be looked at by each department head and reviewed by SAM.

You know, and that's what we do. Before it goes to Lisa for review, we're going, I'm meeting with each department. We're going through line-by-line items. We're looking at, okay, we can do without this year. We can reduce on that year. And you see that in her summaries up there where you see some of the red where we've cut in certain areas. And so that is happening on that linear level, that granular level.

I believe if you go back to, so my first budget cycle that I took over was the 2018 fiscal year, and that was when Joseph was interim before Kathy came back from Bastrop, and he took We took a red pen to that budget, me and Joseph, and it was a lot of pushback, but we got rid of a lot of contingency that was built into the budget. And that can look in historically, but I think year over year, our budget, other than personnel costs like police pay parity, we have not had that great of a percent increase. Because that one year, I don't even know what we cut, but we cut a lot.

and i'll just add and you can look at this in the budget book itself i just grabbed public works for the past couple years where we had full data so in the 2024-25 fiscal year the public works came within you know one percent of what was budgeted is what was spent like 99 was spent That's incredibly tight. That's a little too tight. That's a little too close for comfort. The year prior to that, they came within 8%, which is a little more comfortable. So I think that just shows there's not a whole lot of fluff there. It's pretty trim because we're getting really close to that number, which, you know, it's kind of a crystal ball to try to guess what you're going to expend. And you can look at that across the other departments. You're not seeing...

Surplus of 20 30 percent where the budget wasn't used So it's just trying to hit that number in our three largest budget budgets and the general funds can be please fire public works Those are I think more than probably three-fourths of the budget if I had a guess And then again public works is another that's another thing that's affected by external factors Yeah, the price of equipment and

Here's the tariffs that we've got to deal with suppliers Right that's heavily impacted by that and you know in the public works specifically, you know There's funding for road repairs sidewalk repairs and you just don't know where those numbers are gonna hit You don't know what potholes are gonna be filled. So you try your best You kind of look at what it's been and try to base it off of that. So you you're hitting the number, you know, I Every time we go through our budget, we look at, okay, what have our expenses been last year? And let's use that as a gauge to see where we're going to hit. We know where maybe we saw that the price of asphalt patch and concrete patch has been going up. Okay, we've got to bump that number up because we know it's going to cost more and we're going to be patching about the same amount.

On the other hand, we've been pretty lucky the last couple of years that we have. saved on some of these projected expenses. And they've gotten money back.

On some of the capital projects, for sure. On some of the capital projects, yeah. Expense control is, the staff works great on that.

They're not spending what they budget. The budget is just about, we intend to spend this amount. And if you go over, you have to have available cash like this.

And by state law, I have to adopt a balanced budget. So we have to make sure all the revenues supersede the expenditures.

If you guys will just give me a little bit of forbearance. I'm still trying to get my feet on you. Sure. I've got a very complicated, sort of a complicated question. And part of it is for CBB. And part of it is for our reserve policy.

We can... So we can go... if you want to discuss that during that time. Yeah.

I think that's coming up.

It's all kind of intertwined.

OK, that's fine.

These aren't separate questions. OK. All right, so the other separate question. So my question is this. I know this is an impossible question, but I'm going to ask anyway. Is there a way for you guys to predict general fund returns on CVB expenditures? I know that beds and beds is our phrase of choice. I'm sorry to ask this question now, it's difficult to predict, but are you guys able to look into the future and say, you know, our activities are probably going to generate so much money for the general fund?

Like an economic impact?

Yeah.

And John does a good job with the state on that.

Yeah, I mean, one of the things that we try doing, like when we do annual report, is how, I mean, we can't capture everything. One of the things that our difference i guess in our traditional business is in the city and many of you have known this and heard me talk about this and it's the differences of not having traditional destination drivers so when we don't have a convention center we don't have major sporting fields that we're hosting tournaments on We don't do major festivals that are bringing people from all over. Those things that when you're looking at in a traditional CVB operation, you have sales teams, you have all sorts of people selling, booking, and all those things generate economic impact which come in. So what we do is we've built our own unique program. We know what we're doing. We know how many rooms we are booking for our hotels. We know, and I, so room nights and rooms, we've advanced a long way in tracking all that based on our marketing programs that we do. That we know with some certainty. The impact beyond that, and dependencies on the economy, one of the things you also have to understand, just like y'all are talking here, on a good year, on a bad year, is, whether it's general sales tax or it's our tourism production, you have to realize when the economy is bad or if it's going down and people are getting stressed because they don't know if they can pay their bills, buy medicine, put food on the table, or any of those types of things, when that happens, Travel is discretionary. It's the first to get cut and I don't have to look at you in simple economics If you're having a hard time, are you going to go out and be eating out as much or taking your kids to? entertainment venues or Going on trips at hotels or do you go to stay family or staycations at home and find other things to do people adjust so those are the other kind of things but we definitely have a from our bureau and what we're doing and what we're putting out, what we've been producing. And, you know, part of that annual report that we've talked about over the last three years, we've been almost on a three-year run of year-over-year increases and all-time historic highs. And as we're doing that, you know, like I said, we can look at that.

You guys have done a great job, and I'm not questioning that. And maybe when we get to that section, I'll restate a different question. And I guess what I was trying to get to is this. We have a budget challenge, it looks like, in front of us. And my question was, and maybe it's because of my experience, is if we could revise our budget surplus policy enough to help bridge based

Projected potential from the CDB driving funds into but that sounds like a pretty broad question for you days Are you are you trying to so I'm understanding you and I'm trying to just be sure I'm understanding the question Are you trying to say? If we know what we're producing in room tax hotel room nights or that put a correlation to that We already Lisa gets comptroller reports from the state comptroller and we know what we're producing in sales tax and So are you just trying to see if we could come up with a model algorithm for determining if there's a correlation?

In a sense, if we could project activities to future income, only because we, I think we have the statutory right to have a budget stabilization. We could generate a budget stabilization if we adjusted our surplus policy. I think we could do that maybe one time. I don't know how many times we could do that. And you're right. aware of the swings in the economy and i apologize i'll i'll switch this to the cbd discussion later i was just curious because it's a complicated thing um i don't want to i mean i mean our we provide services we provide protection we provide continuity for all everyone who lives in our in our community and and that's why we're here um i don't like hearing we're going to cut to the bone until the city hurts, because the city is everybody that we're trying to take care of, right? I know that whoever said that meant that those of us in here, right? But I mean, we're here to take care of our neighbors. I don't want to raid it, but if we can do something, if this is challenging enough that a budget stabilization could be considered, I'm just throwing that out there.

Okay, that's it. Let's discuss it in the next hour. Is everyone ready for a break? I want to take 10-minute breaks every hour. And I want to catch this for four hours. It's 9 o'clock. We'll see if we can get to that goal. So let's take a 10-minute break. Come back at 5.55, 6.05.

I forgot one of the color sheets. Too many numbers going in my head.

I know.

I'm getting my hearing aids on.

Thank you. Thank you. It was broken, right? Yeah. Yeah. ... ... ... Thank you.

Thank you.

here here here here here here

I would say a few things on that as I know it.

But that's a legislative issue at the state level. It's not here. We have our current, we call it the Texas two-step, if you were in there. And these are the uses of which funds can be used. I thought you were talking about our reserves.

OK, that's a misunderstanding. Ours have to be used for those enumerated whatever they are.

We're stretching you. I walked in 10 minutes before it started, so you're good. I was worried about the... the, what I guess I'm saying is, what have you thought about facilities to do with what are you talking about? So... Our largest hotel is full service, it's around a block from here. it's under 5,000 square feet of space. It can do about 2, 225 in a conference, in many kind of conventions. That's probably the best. But the hotel only holds up to 148 people, 143. And so my point on that is, that is our biggest, and the only full service, where we can all follow that, Everything goes from 400 square feet, so if I have two men's towels, only they can have two men's towels. You can find that now. So you get to be able to do it, and that starts with just the conference room and the table. And then we go from those rooms and places, 400 square feet. . . . And we don't have space that enables us to be large enough. So it's like when we named our living room, it was small, maybe a special living room. Because one and only thing that's cramped was, and everything underneath that, it doesn't matter which one or how nice it is, like over at Hyatt, it's 70 people in a meeting right now. So you're not generating these bugs on 70 people. That's going to be, that would be bolstering the difference. That would be bolstering. I mean, you never get lost. You don't want to be negative on that. No, off that. And you only get 7%.

on the city side for that. So whatever there is to use at the hotel, that gets put in that corner.

Sure. I hope that was helpful. I keep going smarter now. That's all right. Well, you're 19 months ago. You'll finally go. Yeah.

In this session we have a lot to cover so let's uh I Let's try to move on a little quicker. Lisa, will you continue?

Yes. So as we were talking, the light went off in my brain. On the first couple of pages of the budget document, I do do a whole general fund proposed budget breakout. And it shows you the variance percentage, variance of revenue and expenses from the fiscal year prior to this fiscal year budget. If you look at it, the overall operating revenue for the city was about 3.6% increase overall. And the one department that had a negative budget impact was technology. good job Chris and that's a lot of a contract negotiations Chris's budget is mainly contracts and he does and he covers all technology contracts so it's not just his it's see these contracts water sewers contracts and then they pay back the general fund for that contribution but it just puts all that into one budget for management I even fired a couple of them too yeah so So you'll see the parks had a bigger increase, but they need more landscaping. We added the Veterans Park, electricity, stuff like that, which electricity is also a variable that we have to try to gauge every year. My department did have a larger increase, but it's because of the MCAD share. and our audit share. So that's out of my control because it's based on the MCAT share is based on their their budget and our valuation. It's a percentage of their total budget. So those are things I can't really control fire services. That's based on they take they're based on a 10 cent of our valuation. So if you really think about our tax rate, a lot of that goes towards your fire coverage. So, and then other departments, not much, usually about 4% or less. And then when you weigh it, it's about 3.67%. Police department was 2.2.

Just saying.

That's just operational. That doesn't include your transfer and replacement. If we did factor that in, that would be a higher. But because Tahoe's are, yeah, these are just for straight operational costs, like M&O.

Any additional questions on item, sub-item A?

If not, let's move on to sub-item B. Okay, so moving on from the general fund, so just a quick summary. The only changes I really have to the budget from what was proposed to now is the medical contributions and the revenue side is the property tax differential. Moving on to CVB, you'll see they do have the insurance differential as well, like the other general fund had. And because John, we postponed his discussion from the first budget meeting because we wanted the advisory board to meet first prior to discussing their budget, if there was any proposals or requests. And then the second meeting, John was at a conference. So we had to postpone his till today. So pretty much the CBB budget has not. There's been some new programs. I apologize. I need to get to that page. So yes, their budget went up for personnel, of course. Contractual services went up about $12,600. Supplies went up about $700. Other operating costs went up about $9,000. So if you look at their summary of change sheet year over year, you'll see there's some like that negative 25,000. It just moved to a different GL. So you'll see it pushed back or the 15,000 did. And then the SCR went to another line item that went to the advertising. So if there's any specific questions about John's budget, he is here to answer those for you.

I want to jump in there are Our board has met a couple of times now, and in one situation John presented an event opportunity, and they endorsed that. They just wanted to make sure the council understood that. Hopefully John will have an opportunity at some point to bring that forward. We're hoping that he has success with it. The other thing is the board wants to participate in the annual conferences. and training opportunities. We've already scheduled them to attend Destination Texas. We opened it up to all of them, of course, and we would extend an invitation to council. I had a communication directly with them, and they were overwhelmingly in favor of us participating in that program. And we're excited about it. So we got registered, and I'm not sure that we were reflecting enough in the budget for the future with regard to training and conferences.

Yes. So that was one item I was going to bring up was we would probably need to increase their travel and training budget depending on how many conferences they were looking at.

Right. Yeah. Well, and I think that we need the opportunity to evaluate that as a board to see how many we would like to go to. I know that Councilman Pollard is planning on going to one in October. We have several of us, including just at least five, I think. Isn't that right, Sam? Five or six from the board? And perhaps even a staff person. I'm not sure. But with that said, it would seem to me that this is a good time right now to go ahead and plan for that. We know what these conferences are. There's historical data I'm sure that you can draw on to calculate your budget for travel and hotel and such. So it would really encourage us to do that, beef up that portion of the budget. And another question that's coming to mind that could relate and help us with our revenue side of things, both for not only the CBB but for the general fund, What are we missing in the way of somebody on staff who is dedicated to business development, someone who knows how to sell, someone who can go out and promote the city, can find the sponsorship dollars? We don't have to sponsor events and pay for everything out of a general fund or out of CVB. What if we have somebody on staff who specializes in that type of business activity? And they could be a CVB employee and do a monumental task would be just helping John and Billy in just the organizational operation of the CVB and be out there promoting the CVB through the sales efforts that they could do. I mean, it's something John said earlier that really makes sense. We're not a traditional in the traditional sense, but we could be kind of a hybrid. And so maybe looking at the budget with regard to could we program a staff person into this budget that could be out there helping to develop the business? Because the truth is, you know, the more tourism we have, the more people here, the more they spend, the more sales tax we bring in. And so to sum that up, we're in a need And that need is to raise more revenue. And that's going to be part of the solution to our future needs. And I would suggest we do something now to begin that process. And those are the two items I wanted to bring forward.

Yeah, so we can, if that's something council wants to venture, I can work with John to get a salary scope put together for that to add to the budget. Also, we'll look at the, I do now have a little bit of history because we just booked the travel and training, so I can see how that's all playing out. And I can add that for the final budget adoption as well. And CBP does have, you know, an anticipated budget surplus for just of operational and of 284, so that can be easily achieved in that budget.

Councilman Robinson, on that, I think we could, to look at trying to narrow down a budget that we can work with, is let's just say we want to estimate all the board members do two conferences a year. That gives us a good bearing of what we want to budget for. And then next year or the following year, if there's more or less, depending on the participation of that, we can adjust that. So I think going forward, just as a start, let's just budget for two conferences per member.

I think that's very reasonable. The whole point behind that, for the benefit of our public who's listening and such, is you have a group now that's a new group. They need to learn about the best practices of the CVB operation. They need to learn what their role is. They need to understand how hot tax is used and the benefits of what we can do with it and what we cannot do with it. And the limitations. And such and such, yeah. And so the whole, it is, it's an educational process. And they need to understand and see how, John and his team connect with other CVB directors and staff across the state so that they, we all know what happens when you go to these conventions. You start meeting people, you connect, you find out what others are doing, and we learn. We learn from each other. Good point.

We should be able to pay for it very simply because of the ideas that each of us bring back to help our city. These conferences can be tremendous.

Absolutely.

good for us.

And the only other thing that I think I might add on that was previously under Kathy's tenure and certainly Joseph, I might have spoken to you about this as well. We looked at different models for that potential for a salesperson or to do a contract with someone who could help in that capacity. So it doesn't have to be necessarily one way or the other. It could be a contracted position with a firm or someone to help with that. I've done already exploration into that. Previously, it was side-barred for a while. We don't have space to put a person right now.

Thank you. You just brought up one more thing. What about taking advantage the fact that we have a really strong revenue stream that comes into our CVB. And looking at our budget and perhaps adjusting some of the expenditure level, maybe advertising and some other line items. And what about setting up a visitor's center again? I know we had one at one point, but it was way, you know, it was kind of like off the beaten path. What about having something right out here on the freeway? simple easy to get to place that has a storefront and create some space for staff and and maybe even put a police police substation in it guess what Sam got an idea like that.

We've already talked about that and taking actual steps.

Sam, would you elaborate a little bit on that? Yes, to dovetail on that, we are looking at suitable areas that could be a potential site for a visitor center. Now, for a visitor center, and John will agree with me, it needs to be in the heart of the activity. So, yes, the previous or the former location where you had it really wasn't an area where you're going to have a lot of traffic. So we're looking at areas, potentially, Metro Park is a good area to have that because as that develops, there's more programs and events. come to that area you want to have that foot traffic going in and out of that visitor center to help promote our hotels our restaurants and our shopping and so yes i think that would be a potential joseph and i have been looking at that and we're also talking to john about that we would need some funding of course to build out you know, a space, and also look at leasing that as well. So some funding for that would be appropriate for this, absolutely.

Great minds think alike.

So I can get with Lisa on some numbers on that, on some estimates of what we're looking at for that. I don't have any at this moment. But I think we can come up with some pretty reasonable numbers on that. And again, as she indicated, we have the funding ability to be able to do that. Well, I really appreciate the consideration.

I just had a question on, just one curious question. What is that, the capital project that was 299,000?

It was technically part of the HVAC because they use part of the building. So we divvied up the HVAC based on the square footage that each department, each fund uses. So CBB, water, sewer, yeah, and then general funds. so anything else about oh you want to go back to tourism talk I do not okay I think there's a more appropriate place for that discussion to occur okay um so yeah other than that we'll work on some of those costs for the final budget so like what Sam said for like the build out that doesn't have to necessarily go against their operational budget the lease would the lease cost but the actual build out could be treated as a capital project out of their reserve and the CBB fund has like seven million dollars in the reserve so Shy of it. So Just let you put it in perspective. That's kind of that idea between recurrent and non-recurring expenditures Okay If there's no other questions about the hotel motel fund CBB 2200 we'll move on this is gonna be a water sewer and CBB? No. Water sewer?

No, that's 45. The next item you're going to talk about, I just wanted to find it.

So it's Fund 600, Department 50. 50. Yeah. And Fund 600 has two departments. It has the Department 50, water sewer, and then it has 51, utility billing. So the only changes I have for water sewer at this point are the medical and dental insurance differentials. That's all I have. I am trying to rework the revenue numbers. They do have a healthy budget surplus as of now. We're trying to gauge more of what TAMNA is going to bring on for additional revenue. And also, we know that the AMI project, which is going to start soon, once that's completed, there will be revenue that we know that we're losing because of older meters, especially in our commercial district. it's kind of a balancing act right now trying to figure out what those revenues will be but they have a healthy proposed budget surplus so we should be fine and I'll get those revenues updated by the adoption meeting so water and sewer I don't think they had several changes but mostly it's for operational I believe I'm sorry, that's Utility Billing. I was like, well, they had no change, but that's Utility Billing. So I will make a note. You'll notice that their personnel budget had kind of increased significantly because some field service operators were paid out of water sewer because of meter reads. They do more water sewer functions. They are paid out of the water sewer fund. And because, unfortunately, the field service position usually rotates more, has turnover more than because of the nature of that job, a position was left off of the budget last year. So it's been approved. It was just we had a vacancy for so long that when I did my calculations, it didn't bring it back over. So that's why you see that differential. And that was a mistake I made last year. Don't do that. I know. But it's been corrected, so that's why you'll see that larger increase. It was already an approved position. It was just because there was a vacancy at the end of the year. It didn't pull over correctly.

What about the groundwater reduction plan?

So that's based on pumpage. So if you look at your water bill, you'll see there's a Lone Star Conservation District chart, and then there's the groundwater conservation district chart, or groundwater... Conservation. Conservation, sorry. Those are, and Joseph could probably explain that way better than me, but we're required to collect those to promote conservation. So the idea is it's a percentage that goes on your usage. So as you use more water, you pay more of that fee to then try to promote conservation. So what we do is typically, that's usually a pass-through fee, so we have an expender line that matches that, and it's mostly for the Catahoula Well down in Panorama Village. Did I hear you?

You passed through, so it's a $27,500 increase, but really that's kind of...

It's based on pumpage.

Pass-through.

Yeah. Okay. And that GL for the expenditure really mostly pays for the Calhula well that we have with Panorama Village that was built in 2014. There was a big decrease in the water sewer budget and it was for meter replacements because we are doing a huge meter replacement project so that they reduce that line in by 52,000. Those commercial meters are very costly. And we have a lot of commercial that uses a lot of big meters.

I'm trying to find out what you're talking about. Oh, the 52?

Yeah, that was the... 52.5? Yep. We reduced what we need to do to replace, because we're doing the larger AMI replacement. Other than that, other than... Like I noted there's I think the only other larger increase they have is 12,000 and That was for increased sludge halls Because we're adding you do have to consider this budget does add on another plant and several lift stations as well with the Tamina community so Your operational costs are going up as well So I did get some good and that's the other problem is I try to base it on I do get reporting from a one from what each consumer uses and Because we now control that CCN, so it's technically our reporting. But we have to consider that those meters are very old, and they're probably not very accurate. So it's hard to gauge what will be a good revenue number for some of those properties.

Is there one plan to replace the meters?

Well, that's what we're doing right now. Okay. It's just based on the historical bill, and it's very hard to kind of pinpoint what. Got it.

Yeah, that's what I thought. Those meters are very old. They're getting new meters.

They'll be our AMI system, so we'll know.

That's included in phase two, right, of the Tamina project? The plumbing contract. Yes, the plumbing contract.

Yeah, paid through with ARPA dollars. Right.

Which still has to be completed.

Yes.

We're working on it.

Very aware. Okay.

Is there any questions about water sewer? If there's nothing else, and then just utility billings, the other part of water sewer, and there was no increases other than the salary and wage. Tammy does a really good job at negotiating prices for bills and everything else like that. And then section D is non-major funds. Those are legitimately the revenue offset for the equipment placement transfers, and then the Metro Park PID. The PID has no bearing on any city financials. The city does not pay for anything for the PID, doesn't pay for the debt payments. It's all from the special assessments on those properties within the Metro Park PID boundaries. But state legislation requires me to adopt a budget for them. So that's what that is.

Even if it has two goose eggs?

Yes. That is one of those things that just has to be there. It's a little confusing, but that's it. And then the trash fund is a non-major fund, and it's 140, and it's basically just the cost of trash, and then the transfer is the revenue from general fund for the coverage of the trash cost. And that's about it.

Okay. Yeah, if you want to move on to. We're going to move on to item number nine, special consideration items.

So, Mayor and Council, I kind of provided a combined document for your review. I believe it was March, could have been February, but we did discuss the general fund. I did a reserve study based on GFOA's best practices in coordination with the developer of that, I'm trying to think of what a good word would be. Basically, he helped create that framework, Mr. Kavanaugh with GFOA. So I worked with him and did kind of a reserve study. And the 180 days as a background was adopted, I believe, in 2018 when we had a newer council come on board. They wanted to make sure that reserves were safe kept. And they were used for appropriate reasons. So they put in that 180 days, even though the GFOA best practice is 90 days at a minimum. So we do supersede that, obviously. And we have since about 2018, 2019, I believe. So that currently puts us about $5.9 million, because it basically takes your average daily cost of business and then divides it over 365 days. There is, you also have to take into consideration, if there was a major revenue shortfall, we're not gonna continue operations at full capacity. There will be things that will have to be looked at and maybe foregone, you know, you're not going to, you know, we may not do as much travel and training. We may not do as much. We might look at our contracts and see what we can reduce. You're going to go into negotiation mode and try to figure out what is the necessity and what is something we can bypass for at least a year. So that number is based on straight up how the budget is. It doesn't take consideration that there will be reductions. So. you know i think so at the end of the study and i'm not going to go through the whole presentation i already did that once but um it is online on my financial transparency page the presentation if you would like to see it but it put our risk score at 26 so it basically recommends that we stay within the 90 to 120 day reserve i believe So if the council and council has the right to revise that policy, I can revise it at the direction of what you guys prefer. And there are if you read the policy, there's certain things that it can cover, such as non-recurring items, revenue shortfalls. But if you go if you know we and when you look at our general fund reserve on unassigned balance, there is a cushion we have about three million that's not restricted whatsoever so that money can be used for non-recurrent items and we don't even have to touch our 180 days so we do have a healthy reserve on both sides so it's really just what you want to put as your minimum so if there was a larger project or an opportunity that came on you're if you needed to go lower you have more flexibility basically that would be the situation If we lower it, it doesn't mean tomorrow we're going to spend it. That does not mean that. It just gives you more flexibility based on our historical. We've seen what our volatility and our risk is. And Charlie brought up during COVID, we were fortunate still to pretty much still come out okay. Like we were very fortunate. A lot of to-go liquor sales. We'll say that.

Lisa, I thought this was really interesting. when I was looking at this graph and the major event issues. And you could see where, when COVID hit, that dip was not as dramatic as I thought it was gonna be. And then the way we bounced back from that, it just, it did, it saved the day, but it was the fact that we recovered so quickly. And that, to me, and look at Harvey. When Harvey came through, how quickly we recovered from that. And it just, in my mind, reinforces the fact that, yes, we absolutely have to have a reserve. That is a good business practice. I think we just probably can back off of that a little bit, and a 90-day would probably be sufficient. But not having had a Apparently, when council did this, there's no real professional risk analysis that was done. It was an arbitrary kind of decision, wasn't it?

Yeah, it was just a direction from council.

But that's fine. But now we're in a situation today where we had to raise taxes last year. We're looking at what our needs are going to be for the future. If we free up some of that for the future and classify it the way the council thinks it should be, whether it be you know, committed to certain funding-type activities. I'm not suggesting that we just unclassify it and leave it there, but maybe some of that could go into available cash for the future. At any rate, I personally feel like 90 days is a pretty good number.

My question is, what does it cost us based on you know, what it has maybe over the last five years, how much have we had to put into the reserve to keep it at that $180,000?

It just varies on your budget increase every year. So usually I think it varies about $100,000 we throw in there every year, give or take.

It's self-supporting, basically, Joan. I'm sorry. It's self-supporting, basically. $100,000, $90,000.

It just depends on what your expenditures are that year, divided by, you know, yeah. So our expenditures don't go up a whole lot, right? They go up about 3%, 4% looks like.

That's money we didn't spend. That's money we did not spend. Right.

And we've been very fortunate the last couple of years with interest rates. I know it hurts most of the world, but we've been very beneficial of interest rates. But I can't bank on interest rates, so I can't use that as a main revenue source because those can change overnight. No. But that has added a lot to our reserve amount as well as that additional revenue that we don't, you can't really budget for interest. I put a little bit in there, but you just never know what's going to happen with interest rates.

Yeah. Do we have an official austerity plan already? Have we already looked in case something happens?

It's like a level of service plan, basically. Do we have a minimum level of service plan already? So obviously there is priorities that we will, you know, personnel is going to be our priority to retain and retain our service. The majority of our personnel is PD, so that would be, you know, That's going to be our first priority. Second priorities are going to be contracts that we have to commit to and that we need to do for cost of business. And then usually the other things are going to be like your office supplies for travel and training. Those things are going to be the ones that get more chopped than not. Office equipment, stuff like that. We'll probably, if a project hasn't started, we might try to postpone that just to try to keep some revenue unallocated at that point.

I'm not familiar with municipal strategic plans, but could that be covered as part of the strategy?

It's a one-time expense.

Yeah.

Yeah. Absolutely.

Yeah. How much money we can use.

We don't have a policy written. No. But we have a good plan of what to do. A priority plan. You know what I mean. But it's not etched in stone.

it also depends on the situation as well you don't have one situation it's going to umbrella everything so depending on what what it is that we run into we have to tailor our operations based on that exactly like covet would probably be a good example um during covet um obviously there wasn't much travel and drain in because everything was shut down so that saves some money there um we also um

you know, not a lot of people were out and about, so we saved fuel costs. You know, so there's things that happened because there wasn't, you know, there weren't as many people out and about, so PD wasn't responding to crashes and deaths.

Most of it was rain and wind damage.

Yeah. So, yeah, so situational is a good reason, yeah. And if we do have an emergency, like Harvey was one of our biggest ones because it shut down, and Barrel was our last one because it shut down. Shenandoah was one of the last areas to get electricity, I think. So you know, you lost some use of revenue, retail sales. The only benefit we've seen is when you have a natural disaster, they call it the boom. So usually you'll have a disaster, and then the next month people have to replace beds. They have to replace groceries, so you'll see a mass influx of sales tax the month following, especially during a flood event in southeast Texas. If your house gets flooded, Home Depot is going to be making some profits. Sam's Club, same thing too. You'll see those retailers pick up a lot of revenue the month after a natural disaster. It's all situational-based. It's a little hard to kind of gauge, but the priority has always been keep personnel level and keep service level, but let's adjust what we can to offset that economic differential.

Well, I'd like to propose that we revise our reserve policy and that we ask our city administrator to make a recommendation to the council on the number of days. Have his input on here as well.

Yeah, we'll put this on the future agenda then.

We can get it on to the 20, I would prefer to get it on to the next, the 26th.

Yeah, I'd love to see it as soon as possible. We can turn that around pretty quick. I would also recommend that once we look at reducing that day coverage, we can also give some recommendations on what we could potentially apply those savings to, whether it be all one-time expenses, or we sock away some for other projects, whereas infrastructure projects that may come up that we're looking at down the road, and I know Joseph has a whole bunch of them that we could probably apply to as well. Right. I think that's great.

Perfect. Let's do that then. He's got a whole 10-year plan. Yeah.

He knows how to spend it.

10 years worth. But he plans it well. He does. All right. Thank you, Lisa.

The next thing is going to be court study, so I'll let Jackie take it away.

Yes, I'm here in council. This came up as a an item presented by council to take a look at. Could there be a potential revenue source to the city if our Shenandoah officers where to file their tickets with our court versus their current practice and procedure of filing it with Montgomery County Precinct 3. And so what we looked at is both the what would be our necessary budget impact and budget expenses compared to what the revenue potential could be with those tickets. just a high breakdown of what was included in the, uh, what Lisa sent in the special consideration is to reestablish a municipal court here, we would have to reallocate some funds from the current community development department, which would be salary and wages, uh, and then add some additional funds for operating expenses, contract services, and then some initial startup costs. That court budget would be roughly 135,000, $696. You'll see that break down the reallocation from community development, the existing court budget to the fiscal year impact this year of the $57,059.25. The offset of that, the revenue side, the projected revenue side, we looked at the number of traffic violations identified within the police department for the 25 calendar year, which was 5,926 traffic violations, which I used a matrix from our local surrounding courts to determine those dispositions. When you look at a court ticket, you've got somebody can just choose to pay in full, close it out. There are certain violations that have administrative fees that can then close it out at a reduced rate or those that are either dismissed by the judge, deferred, appealed, those types of activities. And so based on those historic disposition patterns from our local courts, we could approximate that with the number of citations that were issued from that 5,926 violations potential revenue stream of $50,000. And so basically after comparing the budget impact and the budget needs with the operations of the police department currently, it's not financially feasible at this point in time. Chief Dunlap did look at the 26 numbers, and they're trending just about the same as the 25 numbers. And we talked about just continuing to monitor that to see if there is in the future a potential that those revenues could be there for the city. But at this point in time, not the case.

You never mentioned warrants, FTAs, for example, that kills the police department.

It does. So right. So there is a part of that technology fee is there are there are certain programs and softwares that you enroll on that do notify either our department or other departments that are prescribed to it to those warrants service of those warrants, whether it's even just from the court staff side meeting officers signature to execute summons, those kind of things, but also the transportation and the issuance and the handling of those warrants. Right.

It was a big annoyance to the residents. I got called up here, I think, about twice a year to serve on the court, and I hated it. Everybody I know hated coming down here for that. And it irritates everybody. It also gives the image in the community how bad we are, how bad our police force is.

I did include that as part of the the analysis, too. I did. I did. I was curious about what that looked like as far as jury selections with our residents. And surprising to me, Oak Ridge only had a couple jury trial scheduled. So I don't know if it's and that was a primary factor. And when I looked at this is what are their their dispositions look like? Because we would maybe not see the same type of violations, but the same type of violence between, you know, this this immediate area. So, surprisingly lower than I expected on that, but yes, you are correct.

If we did need a jury pull, it would be our... We don't have that many people in this community to go to those meetings. And what was it, every Tuesday or so, every Wednesday, you would have a court?

They were doing court twice a month, and I think that's what Oak Ridge does. I would anticipate... I did budget for two court settings a month, but that would just depend on docket load and sizes, too.

Thing to do All right Can municipalities share court facilities and split costs are in split revenue I

I think you run into an issue with the jurisdiction overlapping. I don't want to say we share judge and prosecutor services. You're talking about could we pair up for jury trials and stuff like that if we were to have those? You can. I do see what happens is, for Huntsville example, and the only reason I know this is because I was actually called for jury selection on a municipal court. They will pile a court docket for just jury trials. They will select one jury, and that jury will try all two, three, four cases. So you're not consistently compiling. You're not having to pull for one setting per one citation. So that practice may slim that down a little bit. But again, you're still reaching out to the local community to compile the jury.

Do we have any obligations financially

for administering our... No, their financial gain is by the disposition of those cases that are filed over there.

Thank you, Jackie. Thank you. We'll move on to the strategic plan study.

I'll take that one, Mayor. Okay. So this was an item that I put on, and I believe this is a strategic plan for the city, gives us a roadmap of who we want to be, what our identity is, and shared visions from not only the council but also staff so we put this shared vision together it gives us a road map a playbook of where we want to be short-term and long-term goals usually you look at a three to five year strategic plan now this plan needs to also be flexible because we know that there can be turnover on council as well but what what's good about it is it gives us a a scoring grade book of where we're going to be that that three to five year period and i know the council here has a lot of great ideas we have a lot of visions and i think if we pull all those visions together and align them in a strategic way we can accomplish those goals together and so what i've put together is an estimate of around 60 000 to go out for proposals for us to have a strategic plan The strategic plan will also tie into our budget process. So whatever it is that we determine as our initiatives for a strategic plan, we will need to budget for that too. So we would do this strategic plan before the budget process starts so that we can align that up. So when we're here next year at the same time, the items that we're bringing for you will be tied to the strategic plan. So happy to answer any questions you may have on that.

Well, sure, I gotta jump in here. As you all know, I sat on his side of the bench when it came to public administration, and all my organizations did this. This is actually fun to go through. For a council to go through a strategic planning session with staff, you get together, you do a retreat, you spend time. Establishing what your vision is, what your mission's gonna be. You identify those things, you set goals. Usually, I've seen, I think anywhere from six to eight major goals will evolve. They'll come out of this conversation. Goals about staff, goals about public works, goals about parks, and it just goes on. And just as Sam just said, out of that you'll have a set of strategies. And these are your budget tools. They're your triggers. You want to accomplish this? Here's your strategy. What's the cost associated with that? And when the councils adopt these strategic plans, they now have hooks that they can hang their hat on when they make a decision about they want to spend on X to accomplish this. Whoa, it's in the strategic plan. It really works well with the public. the public perception of the fact that, hey, these people put a plan together. We can read it. It's very transparent. It's out there. Of course, with the internet and all that, it's so easy for them to see. And this is totally different. You've heard of terms like comprehensive plans and such. That's not what this is. This is something that we use the term, Sam, as evergreen. Right? Meaning that It evolves. It changes with the seasons, whatever seasons we might be in. So I'm so excited that you're going to do this. Thank you.

Yeah, something different. We do have a 10-year plan. I know we went over that, too.

You have a comprehensive plan. Comprehensive 10-year plan, yeah. There's a big vision required by a statute, basically. The state's required. How are you going to deal with these major projects? Mobility, all that kind of stuff. This is how you're going to operate.

It's like a thoroughfare plan.

And typically, you want to try to tie in some of those plans, your comprehensive plans, your, say, water and sewer studies as well, your parks master plan. That also ties into your strategic plans so that you're meeting those goals on all areas of the city. It gives us purpose is what it does.

Sounds like a great idea.

Any other questions?

I just, more of, I guess I'm still trying to, I've been through different things of this, and so definitively, depending on who you're talking to, what industry you're talking to, haven't been, haven't done that here in this industry, and so I'm just trying to find out what's this kind of scope, you know, the tangible scope that you can grab onto, say this is, This is the vision of looking at what we want to do for the vision that we see. So there has to be so many different types of tangibles. You know, that's, so I guess I'm looking for the financial goals.

Correct. You want to have obtainable goals. So like any goals that you set forward for anything, personal or business, you want to make sure they're achievable and that you're capable of doing those. You don't want to set a goal that's not achievable. And it comes from The ideas that we put together, we brainstorm together, could be public safety, it could be quality of life, and so forth. And so those are the things that we don't know yet until we get into a room together and start identifying what it is that we want Shenandoah to be. And a component of that also is to get resident feedback on that as well.

Yeah, absolutely. 100%. Good.

So this item is one of those items that's like a non-recurrent item that can be funded out of the available cash. It doesn't have to go against your tax rate operational budget. So this is kind of a good example going forward of what can, you know, this and capital projects. Good. So is there a consensus to move forward with this item?

I certainly support of it, yeah. Okay.

Yes.

And Joe and everybody in here, there's a couple of places you can go. go to the Woodlands Township. Look at their strategic plan. You'll get it immediately. You'll understand it. Or go to Just just let me there's a couple of other towns up in the Dallas area that have some really good ones, too I can send the council some examples of links to cities that have strategic plans you can get an idea what we're looking at

And also, with the strategic plan, my department can finally get the best budget award with GFOA. That's right. So it would go into other good things. So I will put $60,000 as the cap. And we'll see what the bids come in as. And then if there's additional funding needed, we'll come back at that time.

And we can always negotiate. Yes.

Yeah, so I don't have an actual, that was not an, that was kind of, after we started talking, CBB would have its own strategic plan, because obviously it's different than a city's strategic plan, and I'll let Sam kind of elaborate.

Correct. And really, same type of vision. for the tourism is to have a strategic plan for the board and for staff to understand what what what it is we want to do and what is our strategic planning for tourism and for our CVB Department and so by having a strategic plan same idea what is our identity what do we want to be what is our purpose and goals and I think that is also needed for that particular area as well. Give us some guidance. Give us a roadmap.

Right. So I think we'll have that conversation in our next board meeting. I suspect that you'll have a consensus from that group as well. So you might as well go ahead and move forward.

So, please, we'll go the same amount?

Yes, I'd say the same amount.

That would be totally off CB funds, not the general funds. And then the last study under special consideration studies, we'll get through this and then we can take a break, is the salary and comp study request. And that's also a SAM request.

Correct. So one of the items I also want to look at is, you know, we talked a lot about pay parity for the police department. I think we should also look at our compensation for the other side of the house, non-public safety. We're a unique city. We have small departments, but we have many hats that everybody wears. So there's a value to that. And our employees are very marketable that way. And as we move forward as a city, we need to be able to have competitive rates so that we can retain and also recruit the best team members so that our city can continue to function. I'll give a good example. When we did the tours around the city and we talked about our infrastructure, our public works department, You know, that group wears many hats. They're dual certified. Most cities don't operate that way in public works. So they're very marketable. They can go to a private utility somewhere and make more money or have better opportunities. We want to keep that. We have very talented and very skilled public works employees. And that's just one example. You can go around the city. finance department, community development, CVB, everywhere around the city we have that same type of mentality. We want to keep and retain that. So I think a compensation study is needed to see where we're at. And what a compensation study does is looks at your particular operations what your pay rates, what your compensation, your benefits packages are compared to others around your area. We compete with large cities around our area. We compete with the Woodlands Township, City of Tomball, City of Conroe. You look at a 30 mile radius, those are the cities that we're competing against. We're a small city, so we wanna be able to be competitive. We don't have to be the highest, but we can be competitive, and we need to evaluate that. the study could indicate that some areas were pretty good. And it could say also that some areas we need to improve a little bit. And so the idea of a compensation study is to bring someone in from an outside and take a look at that and study that for us. And maybe also create some policies for us too that can help us be competitive as well. So my cost estimate for that would be around $50,000 to bring in a consultant to be able to do that. Happy to answer any questions you may have.

That can be split between CBB, water, sewer, and finance based on, and I'll do it based on probably a current payroll share, like the breakout between the cost of those contracts. That's a good idea. I don't have those numbers right now. I'll bring them back. That'll take me a minute. But that's one of those ones that could be split. The strategic plan also with water sewer can be split.

Any additional questions?

Just remember, Charlie, that might increase that 3%.

All right, 7 o'clock. Let's take a 10-minute break.

We just have a consensus, right, for this? Yes. Yes, okay.

Let's take a 10-minute break. How's that fire hose feeling right now?

I try to make it .

I draw her, because it is a lot.

.

They're everywhere. No. never been a problem um Thank you. Thank you. Thank you. i didn't That's how far away we came. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. It is. you know reports yeah yeah yeah

yes yes i don't know always

Thank you. . . All right.

Yeah, before you get there.

. . . Well, that's fine. Back in the day. Well, everybody's working. . . . um Okay. Okay.

I thought it was me.

Thank you.

Keep it safe. Good morning.

I hope we have time for a rest.

Let's resume our discussion, our budget discussion. Lisa?

Yes. So we are on personnel items of the special consideration items. The only new personnel request that we have this year is for a water and sewer operator. And I'll let Raul introduce that item.

Thank you, Lisa. So, yeah, this is the recommended facility for a new operator. As you all know, we're going to be adding a community, which includes four lift stations, a new water plant, and also we just had the recent expansion of our wastewater treatment plant. So our operator is running everywhere right now. They're going to every site every day, and they're working a lot of hours. So we're burning them right now. And with these additions, we definitely need this new position open. It's hardly needed, so.

Can you pull that mic closer to you?

Yes. So Lisa put in there the average cost, the complete cost for a new operator position. This is for a DD license, the wastewater, the water, and a total of pretty much $80,000 for any operator. That's what the cost of CD for any operator. We have to answer any questions on this.

How difficult will it be to recruit?

So actually, we already have the position open on our website. We wanted to get a list of operators that are already applying. So as soon as this is approved, I can already have a list of operators available. I already have a few resumes in my office. that I contact them. I told them this is on the budget. Hopefully it gets approved so I can contact them for a final interview.

Is it getting harder to find these qualified, fit people?

It is getting harder, and also there's, I call them wolves trying to steal them from me. Oh, yeah. And, you know, that's what the paper, I mean, paper for everybody. It's very highly needed. Yeah.

Yeah, I think if you're carrying multiple certifications, we're making our people too marketable.

Yeah, and it's private companies as well, not just other cities that are in need of operators. And they, given these contracts, are very attractive on the hourly base. they sometimes young operators go for that because you know they don't look at all the benefits that CD provides and but they look at the high paid job right away and we need to compete with that and we're doing a good job this is the first step we pay for certifications we do

Do we ever, have we ever, or can we? Honestly, we did this when I was in telecommunications when we put people through certifications that we had them sign a document that they're going to be around for at least a certain amount of time. I didn't know if that's, you know, you can do it or not.

And it just helped. Texas is a right to work state, so it's a little harder. Yeah. Did it hold water? Yeah. I've tested them.

Yeah.

Did you say it wouldn't hold water?

It wouldn't hold water.

Yeah.

What we spend on those certifications is not much. So it's definitely, I don't want to put that in a contract that will avoid because of that.

How's the turnover in that side of the engineering? For operators in specific? I was an operating engineer in New York for 33 years, but I was on the hoisting and portable side, not stationary side. This is what you're talking about. This is stationary.

Yes. I mean, you've all been on our way to our treatment plan. It's not the best smell in the world. It's a hard job. Sure it is. You know, you're in the sun the whole time.

But you know that going in.

Yes. Yeah, but sometimes it gets to people at a certain point that they cannot take it anymore. So, you know, you need to take care of them to keep them. And we'll be doing a good job. We've had good leadership with Joseph. I'm trying to continue that as well, earning their trust and trying to have the best polyworks department in the state.

And Charlie, specifically to your question, if you recall, it was probably about two or three years ago, we almost lost a couple of operators because they were being headhunted by another firm and And we did a quick evaluation of salaries and got them up a little more competitive. So we've been able to retain them with council's help to make sure that they're being paid competitively. So we've been able to keep a pretty good handle on our operators. And the nice thing we have is Three of our four operators started as field service reps, got their certifications, and then promoted up into that position. We were able to promote that from within. So that's helped maintain some of that loyalty as well.

But you're looking right now for someone that is an operator that's going to step into this?

Yes, we'll need someone to step into it. We don't have anyone in the field service rep ready to move up into that.

Yeah, you all probably should have already had this person. in place, you know, in reality because of the amount of work that those guys do.

Right. There's so many programs, you know, fog ordinance, backflow prevention inspections. There's so many programs that just fall by the wayside because they're important, but they're not critical. And right now we just have to focus on the critical.

Raleigh, you said you want to have the best public works department in the state. That sounds like a goal and a strategic plan.

And Charlie, with other cities that I've worked with, it's probably one of the more higher-rated turnover areas. You're looking at least 50% in other cities that I've worked in, and it's just the nature of the job. It's hard to recruit, and it's hard to keep.

Well, that brings up, at the top, the leader there. You've got the leader is highly certified, highly sought after, I think. I think he's nearing retirement. Do we have a succession plan?

I have some ideas on that, yes.

We're training him?

Yes, training two of our best operators right now to take that role, both of them. And I was not kidding. On the best public works department in the state, I will be applying to TML to get that award. There you go. Awesome. There you go.

private ourselves and our employees and we're not going to take care of them. Yes, sir. Whatever their job.

And I will rework these numbers. This is a quick estimate, but I'll make sure that I encompassed all the costs that are, you know, I just wanted to get an estimate number into this document. So they'll be added to the summary change sheet. If you guys, by consensus, their budget can handle another operator, their operational budget at this point. So if I can just get consensus if we want to add this position. It's water sewer fund, totally.

I don't think we have a choice.

All right, so I will add that.

Is it appropriate for me to just say what a pleasure it is to work among a group of people who aren't yelling and screaming at each other? Thank you guys, all of you.

I keep the jersey low.

We are a good team if I ask them to find a different alternate or bring me something different no one fights me

I think we're really good.

We work well together.

I think the reason we work that way, Ernie, is because we have a tremendous staff who really looks out for us. for us and provides all the information and everything we need to make the right decision. And I think that logically that's what we all should be thinking about. Does this, like Charlie always says, how does this benefit Shenandoah? We want to do whatever it takes to benefit our residents and our community. And as long as we keep that as the main focus, we'll do that.

I came here worn out today. It's been a very intense month for me. But all I wanna do now is smile because I know that my family's being taken care of here. And I really appreciate all of you guys, all of you, I really do.

Thank you.

Thank you. Okay, so the next item under the personnel special consideration. Last year, as you guys recall, Harris County, Montgomery County, and Houston PD pretty much proposed pay parity for your plans that were pretty sicker shock to most of us. And we knew because we had a vacancy of, I believe, five officers, Troy, at that time period, which five is a lot for our agency of three. like 30 so we needed to act to get those positions filled and attract it with that pay parity last year's you recall it was a pretty significant hit and we were very fortunate that we had that unused increment with the tax rate to be able to accomplish that pay parity so this year though Chief Dunlap did rework some of the numbers. It's not, the proposal is not as high as it was last, for what we anticipated for year two of pay parity discussion. So that is in this chart right here. Last year we had estimated the year two would have added about 470,000 to this operating budget. The numbers that have been reworked will only, if approved, add 137, 138,000 estimated. to our budget. There is no, because we operate on an annual budget, we can't commit funds for future years on personnel and stuff like, you know, for stuff like these. So that's why this year two discussion's coming back. It does not mean that we need to approve it. It can be delayed, it can be looked at again next year. It's just because we had presented it as a four year plan, we're bringing back a hypothetical year two to you for discussion only. And if you wanted to pursue that, we can add that into the budget. But I will let Chief Dunlap kind of answer any questions. But it basically kind of just increased every position by about $1.67 an hour. And that's pretty much, if you looked at that second page, that kind of breaks out the difference between the two scales. You'll see that for pretty much every step and every scale.

So if you recall, Montgomery County, their first year of the pay parity in 2026, they were going to $70,900. Of course, we went to $75,000 to stay above that and be competitive. This year, the projected starting pay would be $81,900, but Um, we don't know what Montgomery County is going to do at this point in time. I do know that Conroe has, uh, I don't, I'm sure y'all seen the headlines that Conroe is going for a 20%. So, uh, what that's going to equate to is this 81, the second year of the paper. So it'll be that pay it'll be the 81. Uh, I know that, uh, Houston has adopted the 81, which I was very surprised that they did that. Um, so it's just, we were last year when we presented this, uh, we wanted to stay with the pay parity and we knew we had to bring it back year over year. To just be competitive I'm thankful last year that we were able to do that and get that first year up higher And knowing that we got it up that higher That's the reason why I came back with a lower number this year because I knew it wouldn't be as big of an impact But if you have any questions about it How far out of the line did we?

Last year, I don't remember the numbers in front of us, but how far out of the line were we?

So so we went we went above at we actually hit above Montgomery County's 70 because we didn't know where they were going to be at at that time. They hadn't come back with the numbers.

And that was from what number? I can pull that. Sorry. I'm going to pull that presentation up.

Their their previous year, I believe it was 70, I mean, 60 and then went to 70. And then we went to 75. So I knew that there would be less of an impact, but I did reduce it. I reduced it down to 78 as starting pay. So it wouldn't match the 81, but I knew it would be less of an impact there. So it would be from 75 to 78.

Chief, isn't Conroe's 20% jump? That's really because they didn't do anything last year.

They didn't do anything last year, correct.

And they lost personnel.

They lost personnel.

And they finally woke up.

And then they jumped on board, and then they got with the pay period too. But they also had a new chief, and that new chief, I believe, was going into a new budget. That wasn't when I have a new council. Yes, they have a new council as well.

That's why it's so yeah My I guess my question is And I tried to ask it the other day before But I didn't formalize that my words wouldn't come out of my mouth correctly. Yes You still can't get my last name, correct I But part of me is, now, as far as giving raises and things of that nature and having people reach the next pay level, especially in the police department, and excuse me, but that's, you know, You place your lives in danger every single day. And so I believe that means something, also. And the thing that I was thinking about, though, going back to it, is parity. How much, how long, Let me reformalize this so I don't sound like a gentleman. How long is a piece of string? Huh? How long is a piece of string? Yeah, how long is a piece of string? I have no clue, Charlie, what that means. But my thing is comparing ourselves to Montgomery County or Houston and those types of districts and resources, at some point, we've got to say, OK, we've got we have to go back to the way we do it internally and trust in that. If we get out of alignment again, let's set those markers so that we're aware that we're moving into that dangerous territory again and make an adjustment if we can. I mean, financially, we don't know what the future holds. There's so many landmines out there with the state and regulations they're gonna put on us as far as taxes. But I guess it's the word parity and having to do this big research thing going on and on. I think if we need to readjust what we pay people, that needs to be identified, and we get on a good schedule for that. Every year coming back around and going, so and so raised theirs up to this, so we ought to do that. I'm going, OK, does everybody deserve that bump up? Are you just doing it across the board, or is it just representative of that, and everybody has to still meet their qualifications, get certified in certain things? Because I know that each level is going to require a certain amount of income, a certain amount of benefits. And so I just, at what point do we pull it back in-house?

Right. So the reason why it was brought again this year because the pay parity was this plan was over a four-year plan that they they put out there so this was Montgomery County's plan that I have right here if you want to see it and then Harris County had theirs and Houston had theirs so I wanted to present what they had and that's what I presented last year I presented yeah what they showed and and how it progresses over several years. Yeah. So that's the reason why we brought it back again, because we don't know where these other agencies are going to be because we haven't seen their budgets. I don't know where Montgomery County is going to be. These are our direct competitors. So Houston, because we've actually gathered some people from Houston and Montgomery County. Yeah. So those are our direct competitors, Houston, Harris County, Montgomery County. and and conroe and i know that we don't have as many calls and everything but it's about the level of service and what the professionalism that we want to provide here in our city we're a unique city and we we provide a different level of service um shenandoah is we're known we're known for our professionalism we're known for our ability to to apprehend uh criminals because of the level of service we provide and the type of personnel that we hire and the way we conduct our business way we train our guys and in the uh the officer readiness program and everything so um you know there's there's a certain expectation expectation with the shenandoah police department but you know we had to bring it over year over year just because you know that was part of the pay parity um that we had to show hey look we're bringing this back because this is what we know our competitors are are bringing and um This is what they said. They're bringing we don't know we don't know if Montgomery County's gonna come in and say hey We're not doing anything. We have no work the idea, but I can just tell you that, you know, Harris County came in I mean Houston came in and then we know that Conroe did yeah, so You know, we had to bring up something You know because we didn't know where anybody was gonna be.

Yeah, and I and I Goodness, I appreciate one thing, your philosophy approach to how the Shenandoah Police Department should not be reactive, but should be proactive. And I think to have individuals like that, you want them to be of the highest caliber in their So, no, I'm just, you know, I'm just, I guess it's mainly for me, it's how we're evaluating it. You know, I want to make sure that, and I've even expressed this to Sam about, you know, performance-based and certification-based. And, you know, we want the right people.

Right.

And the question is, but, I know and understand the necessity for, well, and this goes to, you're picking, your guys go through a probation cycle, so you're able to observe people, you're able to watch them, and you have an understanding expectation. And the thing that you say, if you stay here, here's how we're going to take care of you and your family. Correct. And I appreciate that. And I'm not to... saying and trying to say anything I just people are you know you're just two dollars worth you're worth two dollars an hour more right yeah whatever that's that's not the thing I'm trying to communicate the thing I'm trying to get to is the level of our responsibility of are we making our decisions based on our your day-to-day operations with the individuals that are working in your department Or are we being influenced by, OK, Montgomery County bumped it up. Houston bumped it up.

Well, unfortunately, that's just that's that's how the game is played. You know, when it comes to law enforcement. Money talks.

Yeah.

And and you have to to understand that and know that in law enforcement, you have to be very careful when it comes to performance-based pay. Because that can get you in a lot of trouble in court. So that's something you really want to avoid.

Well, I think what I'm saying in performance, and I'm not saying in how many tickets can you write. That's not. So that would be, yeah. That's a word jumble right there.

Law enforcement is a profession that you're paying for the position that you're expected to perform at the given level. If you don't perform, then you have pips. You can pip a person to improve your performance or you're out of here. Because you're paying for the position. You're paying for the position. You're not paying for the Because that person is not going to be you know it could be very slow for an entire week Yeah, and then that weekend. They could just light up. Yeah, and how you perform during the week when it's low Doesn't correlate to how you perform on the weekend when everything is you know yeah? It's gonna be at a different level at certain time right right exactly so you're paying you're actually paying for the position and and that person filling that position is expected to perform at the given level.

And I guess that's part of it. You used the term PIP, and I have no clue what that means, but I'm sure it's a performance improvement. And so my thing is there are measurements that we're doing. We're not just saying, I'm bumping you up, period, regardless of how you, I felt you, And a lot of my saying this and bringing this up is for our citizens who are listening. They're not sitting in here and hearing about this. And there's a lot that we're getting here in Shenandoah because we made that adjustment. But I don't want to see... I see these... I don't want us to be almost representing we're still being reactive. If we need to change the stages and how much they make, then let's do that. Let's make a determination and make sure that we as a council can agree upon something that that strengthens that and, you know, supports that being reactive. And I know you say I know it is the game, you know, but at some point in the game, we're not going to be able to pay those based on our city size. And we are going to have to cut back. And, you know, you're going to have to be down an officer for us to get, which is not what we want. We need to you know, we want to increase it more. because we believe there's great things in store for Shenandoah. And so we want it to be taken care of. But I just think that I'm just hoping that we can get to a place to where it's.

Yes. And so and then that's the reason why I brought back the numbers I did. I didn't go back with their their numbers. I came back with a lower number because I understood the impact it was going to have to the city. We can't I don't have a crystal ball, so I can't tell what the budget is going to be or anything like that. What we're going to have available. So I knew that going forward, Lisa and I have talked about this ad nauseum as far as understanding that that this goal of pay parity, the end goal of one hundred and one thousand per officer for starting pay. When the ability for that to be obtainable, It's very unlikely. I don't see that happening. But we have to stay competitive because if we're not, then you stand the chance of losing personnel. And you don't want to be behind it. You don't want to be reactive with it and wait until you're losing people, and then you get in a crunch where, like before, We're down six officers, five officers, and then we're having to raise the pay in order to try to get personnel. You want to stay ahead of that game so you can constantly have a steady flow of people. But at the same time, I definitely understand that. There's also a budget crisis, right? So that's the reason why I came in with the numbers I did. I lowered I cut it in half compared to to what it was supposed to be.

Yeah. And One of the points that I wanted to make is that I just want to get some warning signs, because we got out of alignment. We just went out of alignment with pay. And then all of a sudden, we have this type of large crevice that we had to cross and build a bridge. And it was a tax increase. And if it makes sense, it makes sense. But I just want to make, internally, we need to have guidelines established like, hey, this is the exact same thing that happened that took us to where we were. non-responsive, if we have to do a parity evaluation every three years or whatever. I mean, if it realistically has to happen every year, then we set the reasons why, not just here it is, we're early on setting our budget, and we're going to get ahead of people, and then we read it wrong. And that's not a bad thing. It's still a good thing. If we can pay our officers more, that's a tremendously good thing, I see. And yeah, I would love us to be in a position to help them and to help all of our employees, but we have a responsibility to our citizens and to the businesses around us to be responsible with the money.

You made a good point there. We have a responsibility to the citizens I think what's important to understand that we have a responsibility to the citizens and that responsibility is to make sure that we have the absolute best that we can deliver in the way of services.

Absolutely.

I always think about that. What's the best benefit for the resident? I want them to have the best officers out there. I want them to have the best public works people out there. We were really in a good position, if I recall, until external forces changed that dynamic. Isn't that right? Correct. Did it start with the DPS?

It started with DPS, and then people were losing officers to DPS because DPS starting pay is still very high. And then Harris County and Houston got on board, and then Montgomery County. It snowballed up here.

It's been moving south. So Dallas area was the first to see these major hikes. And then it started trickling down south. It hasn't gotten, yeah. So it's been slowly coming down. Pretty much any of your larger metropolitan areas were all having the same parity issues. And it was nationwide. It wasn't even just Texas. It's nationwide.

The amount of... It's all about the amount of officers that are out there versus the amount of positions that are available.

Yeah.

Supply and demand. There's just not enough supply. So how do you increase that supply? You know, the media is just devastating law enforcement. They're devastating law enforcement. And so just getting personnel, it's difficult. Yeah.

What happened? The nation definitely was an uncontrollable, unforeseen.

And we're blessed to be down here and not close to Dallas because that area is significantly higher in pay, significantly. So down here, we're not as high as Dallas area, but we have to stay competitive, you know, so we don't get into that hole where we're at.

So Mr. Mayor and Sam and... Lisa, I'd like to propose that Lisa take this amount that he's asking for per office or whatever, apply it to the personal expenses of the police department before we adopt the budget and let us see it that way. I think it would be a lot better than just talking about all these attributes and everything. If it's all right with you. Did I make sense?

It would add $137,000 to your personnel budget.

Bottom line, you want to see what the net is and how it affects the tax rate at the end of the day. That gives you a true comparison of where we are now and what we could be.

I can tell you off the top of my head, you're going to have to go right below the VAR to accomplish this.

Did you say that it's an add-on, right?

Yeah, $137,000 extra. So you would have to go right below the VAR at the 1918 to accomplish this pay scale. I've already worked it out.

No, no, Lisa. If everything stays the same. I'm just trying to put it in perspective work.

Yeah, so you would have to go up to right below your VAR. I understand, Chief. I know him well.

You know what I mean. I understand Joe. I know him equally as well. I know where both of them are coming from. But monetarily, I don't. You know what I mean? In our picture that we're talking about.

Yeah.

The number you're asking for and the number you're just saying, at what stage in the parity plan?

This would be introduced in what he had proposed on the scale. That's in the amendment. So if I add it, I'm just going to do it as a one lump sum. So it would be one. Chinese finance method. 137, so 1, 2, 17. So it would bring your budget deficit to 183. Or you would need an additional $117,000, so you would have to raise your tax rate. So right now, that would be your bottom line that you would need to make up to balance your budget, so the tax rate.

In my thing, we're to the good $91,500. I know you don't see this. Yeah.

Yeah, so the anticipated with all this anticipated budget surplus as a proposal date was sixty nine thousand one during five and then when we calculate all these changes to The insurances Contribution my whole point. Yeah, so it brings you down to So this highlighted section right here is your difference then it's the one seventeen nine eight eight so you would have to raise taxes to Give me one moment. I'll look at that real quick. No, you would have to go... Yeah. You'd probably have to go right below the VAR.

Wait a minute. If we're going to revise our reserve policy...

This is a recurring item. No.

Ask this question. You might be very right about that, but I'm not. Sure. Okay? So you have to help me understand that. Yeah. But Sam isn't it possible or is it possible that we could? Allocate out of the because we make the change In that 90 days versus 180 days that we have freed up some resources that we use a pot since we established policy here Financial fiscal policy can we not allocate some of that? to the police department to cover some of this expense and keep from raising the taxes and

Well, as Lisa indicated, the reserves are for one-time expenses to be able to fund this and continue to fund it. Is that statutory? You would have a reoccurring fund. Is that statutory? We can definitely get some.

It's not a best practice. The situation is because you're always going to be then behind.

Wait a minute. If I understand what you're saying, I don't know. If we make an agreement, if we... set policy that the reserves are 90 or 120. The difference of that is not, how is that going to be applied to a one-time loan if that's

Exactly. That's my question, too.

So that is because it's so this is the situation you can run into. I'm going to be realistic with you. If you keep using available cash and you're not bringing in additional revenue, you're eventually going to zero out. That's right.

But we need a gap period here. We can cover these expenses, not raise taxes and get out there and do what we need to do to generate more revenue for the city. And we're having some discussions about how we can do that. I'm just, I'm looking for a period. Give us a year to work through this.

Yeah, and I agree with you that extra money sitting over here is not a long term. Yeah.

And that's why the best practice is always to net, you know.

But if we can, if we change it and say that it's 120 or 90 days and whatever that difference is, that frees that up to be used how we set policy on it. Correct? Correct. OK. So if we wanted to use that, best practice or not, I come from a family of accountants.

No, you're good.

Sorry. My phone was going off. So if we use that money to get us through, if we find something that can continue to feed this and take care of it ongoing for the future, but that buys us the time to get there without raising the taxes during this time. Is that what? Yes. Yes, exactly.

The only factor is, what if that doesn't come to fruition? Doesn't matter. And now you're behind the eight ball.

There are so many what ifs in the world.

Yeah.

What if, you know, press would actually tell the truth. Yeah.

I'm just giving you my opinion of best practice and everything else.

And that's what you're supposed to be doing, and I appreciate it.

But I'm just putting it all out there. That's why you're sitting where you're sitting. That's right.

And we thank you for that.

Yeah. And thanks. No. And because I'm... It's... I think what it is, and it's not saying to... We want to... we're making decisions that are, it's a gamble.

We might find something. And you're kind of committing to a future possibility. Like, you're making a decision now that could affect the future. That's the only thing you want to make sure, yeah.

No, we're making a decision not to raise taxes and use this money to cover that until whatever you know can be put in place to support it on going past that yeah it's it's it's like saying we know somebody's moving in but they're not going to be here for a couple years you know but can we cover it between now and then without raising taxes i look at it as it's it's the cost of doing business when you're investing you're investing in your future right now and you have to take a little risk And that doesn't impact the reserves.

Well, the committed, the 180 committed. Yeah. If? Yeah, yeah, yeah. It won't affect that, because that goes totally restricted out. So you're just hitting the unassigned fund balance. So you're not messing with your restricted reserves. That's what I was trying to, yeah.

Exactly, exactly. We have an item on the budget in revenue, and it's called fund balance. a place where we fill deficits in the general fund. And it comes from available cash. It comes from the next item we're going to talk about, trash pickup. It comes from cutting expenses. I mean, it can come from a lot of different ways. Or raising taxes. What we don't want to do is raise taxes. We don't want to. We want to keep the police department 100%.

That's the whole thing we're talking about.

So if we just make it a common dollars and cents, here's what it is, then we can make a better decision and get all of the emotions out of this conversation. That's all I'm saying. Because I want to do the best that we can. And can we support it long term yeah? We did something with the trash. It's going to go right back on the rest I mean, it's yeah And we don't know what the state's going to do to us So if I hear you right what we want to do is is

Whatever that difference is between the 180 to 90-day reserve, see what that fallout is. Can that cover the gap that we're looking at without having to raise taxes?

Yeah, right. We're saying we don't bring it to 90, maybe 120, or whatever that number is. Let's see what that is. It protects us still.

And we'll just have to evaluate that each year. We'll have to evaluate that this time next year to see where that outfall is.

If that makes sense.

So just for my knowledge, so I can compose the budget document, we're going with the year two parity as presented.

Present whatever he's presenting.

Exactly.

I was on the list. It was like, we don't have to rework anything. No, no, no.

No, you're good. You just got to put it in one lump sum. Say, OK, here it is. Takes the emotion and everything. Then we can figure out how to pay for it. OK. No. We will.

Right.

Yeah. OK, so I will add that. I'll add it to the different buckets it needs to hit, but I'll put it as a separate breakout on the budget document as well, so you can see it.

If it affects other sides of the budget, we want to know that too. So that's why I asked the way I asked. It's going to be more work for you, yes.

Sorry, last night I had to break out all the insurance stuff. Remember that? That was a lot of work.

Yes, I do. That's not nearly as much of that. I thought that was a good thing. I know you wanted to bring it out of not department, but yeah.

OK. So I will add that, but I'll add it as a separate section, too.

Remember when Rich Wheeler asked, what's the true cost of a police officer? True cost of water? Exactly.

Yeah.

OK. It's true.

Okay, so I will bring that back.

There's a price and a cost.

Cost account, same account. Do you want to call break before the contract is due? Let's go over the trash call.

Pick up real quick.

So Joseph, I think, is leading this one. But I'll let him start, and then I think go over some of the cost differentials.

So staff at council's request collected information from our current trash provider of public services to answer two questions. What would it cost to add one additional bulk collection day to our current contract, which is one bulk per month? So question one is, what would it cost to make two bulk per month? And the second question is, how much would it cost to make a bulk collection every day, which is similar to our old contract?

And I'm still trying to find that here.

Oh, it's the blue tab.

I know I saw it somewhere in here.

Blue.

Blue tab. Thanks. Oh, there it is. And so Republic Services got those prices back, which we've presented here to council. The first thing I want to point out is that the answer to question one, which is adding one additional bulk, is there would be a $2 increase to our current rate.

That would not affect the contract adversely.

Correct. So a contract, when you bid out, competitively bid a contract and award it, if you're going to make changes and amendments to that contract, you have to keep the price of it within 25%, whether you increase it or subtract it. So adding $2 to this, it still keeps you within that 25% cost of an increase to the contract, the overall contract. Now the answer to question two, a bulk collection every day of the week, that exceeded that 25%. So we can't even really consider that because, well, if council wanted to do that, it would require rebidding.

There you go. So now we've got everything in place.

Right. So we'd need to rebid the entire contract. And you could end up with another service provider. And we get to face what we had just last year of everyone complaining about the new trash service just because it would be a change. It would be different trucks, different collection crews. And you could end up with a higher price. Likely you would end up with a higher price. So you've got the information before you, the cost of what it would take to add one additional bulk collection day and every day being a bulk collection day. I happen to answer any questions you have.

Well, no, you brought up extra cans, which I get that question all the time. And the fact that it's $7.50 per can, per month, it's not the can they're building. It's the trash that you put in that can that they're hauling to the dump.

Right. That's a lot of the cost is the disposal fees.

It is. That is the cost. And so that is on... Not on the city. That's on the residents. It is.

And it's worth noting, as you consider adding bulk days, that, and Lisa found this, just a little over 2% of our residents have an extra can, which says to me that everyone else probably has what they need for the collection. So I just, you know, Keep that in the back of your mind as you're thinking about this, because it does add quite a bit to the entire contract to do this increase. But again, that's council's prerogative of that service and what level of service we want to provide with our contractor.

What was the percentage that wanted a pickup, additional pickups?

We don't have any data on that. It's just I know that some council members have heard from some folks.

I was one of them, and I had ten. Ten people called me.

I suspect this is more an issue of poor planning for me and my neighbors rather than an actual need for an additional day. And I also imagine that if we raise taxes to cover additional pickup days, the hue and cry would be far greater than we need to have more bulk trash days.

I totally agree.

So I really don't, for me, I personally wouldn't support any additional heavy trash days because you guys have this amazing, we have this amazing yearly deal here anywhere. If you have a bulk, if you have a, I don't know, a can of plutonium, you can bring it here. No one's asking any questions. So I think, and I'd like to. You just made that public. Seek us out. You can buy uranium on Amazon.

You weren't going to say anything, remember?

But the thing is, the only thing that I've heard that is curious to me is when people have said that, hey, they missed my cans today. Now, that's unacceptable. If we're paying the guys to take care of the business, they need to take care of their business. That's an administrative thing between you guys and our vendors. Other than that, I like the new service. I love the new cans because they're not dragging mine across the pavement to make holes where water will get out. I think for us it's been working well. We are one of the 2% that pays for the extra can. We use it. We're happy to pay it. But again, I think the bulk trash day is just a matter of me and my neighbors poorly planning.

You know, it seems like things have really settled down now. Don't you think? Not hearing any concerns anymore.

Most of the complaints that me and Tammy get is just if it was missed.

I think that's legitimate because maybe the one time a month for the bulk pickup seems to be acceptable.

This is a result of their requests.

We have spoken with Republic about missed trash. Here's the fun thing about that is all their trucks have cameras. And so they just produced a report just a little while ago for me, which showed it is about two full pages of a 10-type font of mistrash reports, and only about 20% maybe. were because of the truck missed it. The others, the cans were not out there when the truck went by. I suspected that.

I saw that movie.

Now there are times where there's some, like Lilly in particular, they've got some pretty narrow roads. And there's one in particular where people like to park on the turn, the truck can't make it. They simply cannot fit down that alley. And so they do miss, you know, there's some areas like that where And we've tried to work with the HOAs. Hey, please speak with your residents on trash day at least. Don't park your vehicles there because you're preventing trash collection. But sometimes the guys just flat out miss it. Not too often, but it happens.

Is that how I'm not strong enough to pick up a car?

No.

And a lot of the times...

The other thing I'd like you to address is on bulk trash day, what is available, what is correct to put out there, and what is not. There is no list.

yeah i'm still still on the website there's there's still a list all right and it's similar to what else i couldn't find it but that's my problem it'll they'll take bulky trash up to three yards or five yards actually it went up uh on bulk day it used to be three it's up to five yards which is basically a dumpster So they'll take couches. What they will not take is construction waste. So if you've got a bunch of tile out there and fence posts and it looks like you're running a business, they're not going to take that.

Any other, because my department feels a lot of those complaints that come in. It's on bulk days because the trucks do fill up quite quickly, so they have to leave and come back. So that's a lot of our calls is, hey, they missed me, but they're just on their way back. They just had to empty the truck. But yes, Joseph's point, we've had several complaints, and then when we reach out to Republic, they have the documentation to provide us that, yes, there was masonry materials that they will not pick up, so they won't empty the trash cans.

So Home Depot has these really strong bags that you can put pretty much anything and just wire it shut. I'm just saying.

Put it in that blue thing and away it goes.

So the only thing I said, I made a recommendation on this memo that if we did want to go with a second bulk day to avoid increasing the operational budget by $125,000, it would only be like a $2 per month. per bill increase if we wanted to do a second bulk pickup. That would just go to the residential.

And that would have to be all across all 1,400, whatever? Yes. I'd apply to every account.

All residential account. We only service residential. We don't service commercial. So that would be the alternative if you wanted to add that second bulk day. Either you would have to increase your revenue, or you could put that charge onto the consumer.

I think we should just move forward.

Forget that idea. Bad idea. Back to your rooms.

We'll discuss that. What is the consensus in your paper? Just leave it alone. Leave it the same. All right.

Move along. Okay, so the next, these were, this is an existing contract discussion. I do have a section for new contract proposals. I will let Public Works handle this first one relating to SDK.

Anybody ready for a break? Oh, yeah, sorry. All right, let's take a break.

Yes.

I'm drinking my beer.

Thank you. No, I'm not.

Word, almost. Yes. No, I think we'll get that. Oh.

Yeah. Yeah. Yeah.

My grandmother's from North Jersey, so I have to tell her. I don't know how to say it.

I don't know how to say it.

I was at a Zoom call the other day, and the guy said he could give us a call. And he said, yeah, I'll talk to you later. And he said, where are you going? And I said, well, I grew up in New York City. I was like, where are you from?

Because you legitimately sound like my uncle.

He was like, Philadelphia. I was like, oh, Philadelphia. All right, so you are my uncle. I asked my dad, I was like, really? It's funny, when I go back to New York, Yeah. It just comes out.

Yeah. And then.

Yeah. I mean, she goes, stop it. What happened? Yeah. Why is everyone yelling? I'm like, we're not yelling. We're talking.

What?

My brother.

. .

. . .

Is this the one? Oh, I love it.

No, no, no.

I'm doing all this.

Just don't go to the council.

I don't care. Don't go to the council.

You haven't seen this video.

I'm sorry, this office is not going to come back and we're not going to be able to touch it. Oh, my God. It's there.